Household Incomes Rise, Poverty Rate Falls
On September 12, 2017, the U.S. Census Bureau released two annual reports on household income and poverty.
- Income and Poverty in the United States: 2016 shows that median household income increased by 3.2% between 2015 and 2016 to $59,039.
- The poverty rate declined by 0.8 percentage points to 12.7%.
- The Supplemental Poverty Measure: 2016 shows that housing subsidies lifted 3.1 million Americans out of poverty.
Median household income surpassed 2007 pre-recession levels for the first time.
- Adjusted for inflation, median household income was $890 higher in 2016 than in 2007.
- Economic gains since the recession, however, have not been equally distributed.
- Since 2006, household income has decreased by 4.7% for the poorest 10% of households but has increased at all other income percentiles, including an increase of 7.7% for the wealthiest 10%.
The number of people living in poverty declined by 2.5 million, to 40.6 million, between 2015 and 2016. The poverty rate, however, remains high for adults with a disability (26.8%), adults without a high school diploma (24.8%), blacks (22.0%), Hispanics (19.4%), and children under the age of 18 (18.0%).
In NJ, the proportion of people living below the federal poverty limit — $20,160 for a family of three —to 10.4 percent, a drop of less than 1 percentage point that is considered statistically insignificant. Seven states had lower poverty rates.
The Census Bureau’s Supplemental Poverty Measure (SPM) addresses the shortcomings of the official poverty measure, which excludes non-cash government benefits from household income.
The SPM takes into account non-cash benefits for low income households like:
- housing subsidies,
- the Supplemental Nutrition Assistance Program (SNAP),
- the National School Lunch Program,
- the Supplementary Nutrition Program for Women, Infants, and Children (WIC), and the
- Low Income Home Energy Assistance Program (LIHEAP).
The SPM also subtracts necessary expenses from household income, like child-care, medical, and work-related expenses.
The SPM shows that housing subsidies lift 3.1 million Americans out of poverty. They reduced the supplemental poverty rate by 1.4 percentage points for children under 18, 1.3 percentage points for seniors at least 65 years old, and 0.7 percentage points for adults between the ages of 18 and 64.
Please note: The U.S. Census Bureau identified an error in the input of SPM thresholds for renters used in the 2016 SPM data products. The base threshold should have been $26,104 and was erroneously entered as $26,014. As a result, the overall SPM poverty rate was understated by 0.06 percentage points—13.91 in published tables compared to 13.97 percent. Corrected tables, research files, and a revised report will be reissued as soon as possible.